Sponsorship Monitoring

How Accurate Sponsorship ROI Measurement Could Change the Future of the Sponsorship Industry

How Accurate Sponsorship ROI Measurement Could Change the Future of the Sponsorship Industry

Reading Time: 7 minutes

Sports sponsorship is big business. Businesses shell out massive sums of money to be associated with events, individuals, or teams, and by 2027 sponsorship spending will reach just under $90Bn. 

For decades, its effectiveness has seen sports sponsorship remain a core component of many businesses marketing strategies.

future of sports sponsorship

However, recent times have seen the first major decline in the sector. This can be partially attributed to the recent pandemic. But the problem is larger than this. A major issue is one of analytics.

Digital advertising has a huge amount of data instantly available. Each click can be measured against a range of performance metrics, this allows marketing strategists to instantly measure the effectiveness of each campaign.

To gain real trust in sponsorship as an investment, this is one of the major factors that the sports sponsorship industry must address. This article focuses on the future of sports sponsorship and how marketers can accurately measure the ROI of such large investments.

Be Sure To Also Read ->Sponsorship Monitoring Use Case Overview

Sports Sponsorship Measuring Effectiveness

While this might seem like a gloomy scenario, sports sponsorship still has one major advantage in its arsenal – A captured audience.

The Digital Advertising Paradox

Digital advertising is certainly on the up. According to Statista, the worldwide spend on digital advertising was $521 billion in 2021 and is expected to rise to $876 billion by 2026. These are impressive figures, but there is a downside to digital advertising that cannot be disregarded – the sheer number of adverts that bombard consumers daily.

Social media news feeds, websites, entertainment channels, and many mobile apps all rely on adverts as their main source of income. Precise figures are hard to come by, a Forbes article from 2017 about Brand Success In The Digital World puts the number of ads we are exposed to daily at between 4,000 and 10,000. More recent figures concur with this and put the figure at the higher end of these estimates. 

This is the paradox that faces digital marketers. Spending more and more resources to get noticed is exacerbating the problem. In effect, it has become a vicious circle.

This is a crowded marketplace in which it is becoming increasingly difficult to simply spend your way to brand awareness.

Sports Sponsorship – Playing to its strengths

The information saturation that bombards consumers has also changed our behavior. Endlessly scrolling through social media news feeds and video clips have had a noticeable effect on our attention spans. According to The Guardian, Twitter trends that lasted for an average of 17.5 hrs in 2013, had declined to 12 hrs by 2016.

This is a weakness that marketers can exploit. Sports fans represent a captured audience. Billions of people will remain glued to their screens through large events like the Olympics, Superbowl, or the World Cup. Smaller events are the same. In essence, sports events are one of the few remaining forms of entertainment that haven’t been shredded into bite-sized chunks.

Despite its inability to compete “analytically” with other forms of media, sports sponsorship can still appeal to a largely captive and enthusiastic audience. However, there is still an image problem that dogs the niche.

formula 1 future of sports sponsorship

The difficulty of measuring the ROI of Sports Sponsorship

Understandably organizations that pay large sums of money to sponsor sports events or teams need to know that it is money wisely spent. This is doubly so in a financial landscape that had just recovered from the Covid-19 pandemic only to face reduced consumer spending as populations struggle with soaring inflation.

With tightened purse strings, the demand for results is intense, and correctly measuring results requires accurate data available in virtually real-time. Until recently, it is something where sports sponsorship just couldn’t compete. When compared to digital advertising, it isn’t a level playing field.

Accurate and timelyanalytics produce instant feedback on the success of any given digital campaign. This allows for campaigns to be versatile and react quickly , depending on what the results show. Marketing managers love this agility, it offers the ability to tweak in campaigns that aren’t performing as expected.

Compare this with the feedback that comes with sports sponsorship deals. Surprisingly, one of the most common insights marketers receive is from the team or event itself. This is not ideal as the sponsored parties have a vested interest in producing positive results. Added to this is the fact that the results are more often than not delayed. Marketers frequently have to wait until long after an event or season has ended before they understand how successful a sponsorship deal has been.

Sports Sponsorship Monitoring – Visual Signals

Understanding the performance metrics of Sports Sponsorship

Key Performance Indicators (KPIs) are another area where marketing departments struggle with sports sponsorship. Just how do you measure the success of a campaign?

In general digital marketing there are numerous platforms to shoose from, each of which follow the same methodologies and use the same metrics to report on. This is not the case in sponsorship valuation/ROI measurement. So, each company uses its own methodologies and metrics to measure the success of a campaign. In many cases, the performance metrics vary between even the sponsorship sellers and buyers.

This isn’t as simple as measuring a spike in sales associated with the deal. Sports sponsorships rarely sell a product, it is a method of increasing brand awareness and purchase intent to stay  ahead of the competition. This is something that short-term sales figures don’t show.

The importance of social media and online platforms is another KPI that sports sponsorship marketers struggle with. Video clips that are emblazoned with the company’s logo can quickly go viral, racking up millions of hits daily. In the digital age, understanding the value of earned media is as important as that of paid media when measuring sponsorship success.

Computer Vision – Bridging the Data Gap

Until recently, there were only two truly viable options to measure the KPIs of a sports sponsorship arrangement. The first of these is sampling the impressions gained during aired content, this can deliver quick results. However, sampling relies on certain assumptions being applied to the data, and these can result in flawed results.

The second method is to use people to physically mark each brand impression that arises during the duration of a sports event. This does result in a more accurate picture, but the downside is that the process has traditionally been expensive and time-consuming. This is a balancing act that marketers have to perform, and the latter option, although supplying useful data, must be balanced against the budget allocated to the sponsorship deal.

Visual-AI brings Measuring Sports Sponsorship Metrics into the 21st Century

Modern Computer vision systems, specifically tuned for the sponsorship monitoring allow for complete and highly accurate analysis at scale in a cost-effective way. 

Computer vision can analyze in real-time the sponsorship value of every game in every league over an entire season. Effectively, Visual-AI bridges the data gap, and for the first time, sports sponsorship value can be accurately measured against a range of KPI metrics.

But this innovation doesn’t just benefit the big teams and big leagues.

Fringe and emerging sports have struggled to demand the levels of sponsorship that could help them develop from minor amatuer status to major professional teams and leagues. The advent of the world-wide-web allowed official and fan websites to proliferate. But the key development that changed all this was the parallel introduction of social media and streaming media, which allowed fans of any sport and any league to watch the content they wanted at any time. It also allowed fans to come together and engage with teams and leagues and create conversations and communities.

This has led to unprecedented growth in viewership for not only mainstream sports but also emerging and fringe sports, According to Nielsen:

  • 40.7% of global sports fans now stream live sports through digital platforms thanks to the growth of connected devices.
  • 39.4% of global fans will watch non-live content related to a live sports event
  • Sports viewership has become a multi-screen experience, with 47% of people who watch sports simultaneously interact with other live content
  • Acceleration in women’s sports sponsorships with 146% year over year rise in sponsorship investment in women’s sports compared to only 27% in 2020
  • New technologies and platforms massively increased investment with a projected 778% increase in sports sponsorship by blockchain and NFT related companies, and we have seen massive investment by social media giants like TikTok
  • Esports are seeing a massive increase too, with 2,254 publicly announced e-sport sponsorship deals globally in 2021 compared to 1,785 in 2020 making it one of the fastest-growing segments
  • Further, in the last year, the female esports fan base grew by 19%, faster than the male fanbase, which grew by 12%

In short, there are now more fans, and more varied fans, across more types of sports than ever before and this has provided many more opportunities for brands to attract and engage with consumers than ever before.

The introduction of affordable analysis of brand exposure thanks to computer vision, allows these small sports organisations to provide read data that can attract the kind of sponsorship that can help propel them to global growth.

Want to talk?

VISUA has developed cutting-edge computer vision that is changing the game for sports sponsorship stakeholders. The technology stack that underlies the process is the next generation in data analysis tools. Capable of content analysis at a large scale, it opens the door for stakeholders to finally understand the value of sponsoring broadcast or streamed sports.

To find out more about the power of Visual-AI and how VISUA’s computer vision technology can transform your sports sponsorship analytics, why not check out this useful article that describes in detail the three key reasons why accurate monitoring is crucial for sponsors

If you want to know more about the technology driving this seismic shift or if you have any inquiries about our product, please fill in the form below or simply drop us an email at [email protected].

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